Last week, I was talking with an entrepreneur that has a technology company. During our conversation, he told me how stressed out he had been over the last few weeks, because of a shortage of operating revenue. He then went on to describe how he could now relax because he just received a grant that would last for six months.
I asked him, what his plan was after the next six months.
He rambled through an answer that basically meant he had no plan after six months.
I then asked him three questions.
- How much time was it going to take to complete the product?
- Once the product was complete “How much time would it take to actually start offering the product to his targeted audience?”
- How was he planning on acquiring customers at a profit?
No, matter whether you are a startup, a small business, or a larger corporation, the most vital skills in any business is acquiring customers, selling to customers and retaining customers – 3 functions of marketing.
Here is why being able to acquire customers at a profit is the most vital skill of any entrepreneur, small business owner, or marketer.
- Without customers, there is no business. You have to have customers if you are going to have a business.
Legendary copywriter, John Carlton, articulates this the best with his quote “Having money solves problems that not having money creates.”
So, the most important question for any business is “How do you plan on acquiring customers at a profit?”
The faster you can acquire customers at a profit, then the more stable the business, and the more opportunities you will have for long and short term growth.
So, how do you answer the question “How do you acquire customers at a profit?”
Prior to answering this question, let’s look at the mindset of highly successful entrepreneurs versus how most entrepreneurs view customer acquisition.
Success Mindset Myth #1
Most entrepreneurs look at marketing as an expense. The most successful entrepreneurs look at marketing as an investment to acquire new customers because, without customers, there is no business.
Success Mindset Myth #2
Most entrepreneurs look at the customer as a way of making a sale. The most successful entrepreneurs look at the sale as a way of earning a lifelong customer.
So, “How do you acquire customers at a profit?”
Acquiring customers at a profit requires planning your marketing.
How often have you put together a marketing promotion at the last minute and hoped that it would it generate customers, revenue, and profit, only to learn that the plan failed miserably and you lost money?
Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.”
So how do you create an effective marketing plan?
Here are the seven steps to an effective direct marketing plan.
- Marketing Research– this is the most important part of any marketing plan. The marketing research gives you insight into what is working, what your competition is doing, how your products and services compare to your competitors, help you decide if there is a need in the marketplace and gives you a good understanding of your target customers.
- Secondary – secondary market research is discovering, compiling and analyzing data that is already available. It is often far cheaper to perform secondary market research than primary.
- Primary– primary market research is gathering data that is not available. This is normally the most expensive form of research and can consist of focus groups, surveys, interviews and other forms of gathering data that is not already available.
- Marketing Strategy– The marketing strategy outlines your marketing plan and how you are going to implement it. A few of the pieces of the marketing strategy include identifying the customer segments, identification of clinching benefit for each customer segment, identification of database list sources, an explanation of how are you going to test your marketing strategy, and finally how you are going to roll out your entire marketing strategy.
- Database Development – this part of your marketing plan, helps you clarify how you are going to handle the data within your database, how you are going to convert prospects into customers, and how you are going to maintain your database.
- Media Plan – your media plan essentially lays out how you are going to reach your prospects and customers, and what marketing methods you are going to use and why. The media plan also includes a prospect and customer communication program.The communication program is an essential part of the media plan because it gives you a visual map of how and when you are going to communicate with your prospects and customers.
- Creative Strategy- the creative strategy describes your offers and messages that you are going to communicate to each customer segment of your market. It includes the layout of any advertisements that are going to be used, the layout of any fulfillment materials, along with a materials production plan.
- Fulfillment Plan – the fulfillment section of the marketing plan focuses on what you are going to do when your prospects respond to your marketing. If you are mailing them free information, such as a catalog, information about your product or service or a free downloadable pdf.
- Budgeting & ROI– when putting together a marketing budget, you normally predict three different response rates, such as a 1%, 2% and a 5% response rate. In addition, you look at incremental and fixed cost, along with any fulfillment costs. The most important parts of your budget are analyzing any fixed or variable expense and also being within the marketing budget.
These are the 7 steps to an effective marketing plan. Start implementing each step of a marketing plan in your business, so you can start acquiring customers at a profit. Remember, the faster that you can acquire customers at a profit, then the more successful your business will be.
Finally, click here to download the marketing plan process map that will give you a printable diagram to help you create your marketing plan today.